Investing in stocks based on valuation metrics is a proven strategy for identifying companies with strong upside potential. Although the price-to-earnings (P/E) ratio is widely used to assess value, it becomes less meaningful when a company is unprofitable, operating with thin margins or experiencing volatile earnings.

In such situations, the price-to-sales (P/S) ratio can offer a more useful perspective. By comparing a company’s market value with its revenues, the metric helps investors evaluate how much they are paying for each dollar of sales.

Stocks with low P/S ratios may present attractive opportunities, particularly when supported by solid fundamentals, improving margins and favorable business momentum. However, a low multiple should not be viewed in isolation, as it may also reflect structural weaknesses or limited growth prospects. Used alongside measures of profitability, financial strength and operating performance, the price-to-sales ratio can help uncover undervalued stocks with meaningful upside potential.

G-III Apparel Group, Ltd. (GIII Quick QuoteGIII - Free Report) , HF Sinclair Corporation (DINO Quick QuoteDINO - Free Report) , Par Pacific Holdings, Inc. (PARR Quick QuotePARR - Free Report) , Genworth Financial, Inc. (GNW Quick QuoteGNW - Free Report) and PBF Energy Inc. (PBF Quick QuotePBF - Free Report) are some companies with low price-to-sales ratios and the potential to offer higher returns.

What Is the Price-to-Sales Ratio?

While a loss-making company with a negative price-to-earnings ratio falls out of investor favor, its price-to-sales ratio can indicate the hidden strength of the business. This underrated ratio is also used to identify a recovery situation or ensure a company's growth is not overvalued.

A stock’s price-to-sales ratio reflects how much investors pay for each dollar of revenue generated by a company.

If the price-to-sales ratio is 1, investors are paying $1 for every $1 of revenue generated by the company. A stock with a price-to-sales ratio below 1 is a good bargain, as investors need to pay less than a dollar for a dollar’s worth.

Thus, a stock with a lower price-to-sales ratio is a more suitable investment than a stock with a high price-to-sales ratio.

The price-to-sales ratio is often preferred over price-to-earnings, as companies can manipulate their earnings using various accounting measures. However, sales are harder to manipulate and are relatively reliable.

However, one should keep in mind that a company with high debt and a low price-to-sales ratio is not an ideal choice. The high debt level will have to be paid off at some point, leading to further share issuance, a rise in market cap and a higher price-to-sales ratio.

In any case, the price-to-sales ratio used in isolation cannot do the trick. One should analyze other ratios like Price/Earnings, Price/Book and Debt/Equity before arriving at any investment decision. 

Screening Parameters

Price-to-Sales less than the Median Price-to-Sales for its Industry: The lower the price-to-sales ratio, the better.

Price-to-Earnings using F(1) estimate less than the Median Price-to-Earnings for its Industry: The    lower, the better.

Price-to-Book (Common Equity) less than the Median Price-to-Book for its Industry: This is another parameter to ensure the value feature of a stock.

Debt-to-Equity (Most Recent) less than the Median Debt-to-Equity for its Industry: A company with less debt should have a stable price-to-sales ratio.

Current Price greater than or equal to $5: The stocks must be trading at a minimum of $5 or higher.

Zacks Rank less than or equal to 2: Zacks Rank #1 (Strong Buy) or 2 (Buy) stocks are known to outperform, irrespective of the market environment.

Value Score less than or equal to B: Our research shows that stocks with a Value Score of A or B, when combined with a Zacks Rank #1 or 2, offer the best opportunities in the value investing space.

Here are five of the 23 stocks that qualified the screening:

Based in New York, G-III Apparel designs, sources, distributes and markets a broad range of apparel and accessories under owned, licensed and private-label brands. The company is strengthening its portfolio through momentum in owned and go-forward licensed brands, higher-margin mix, direct-to-consumer expansion and licensing opportunities. Donna Karan is emerging as a strong growth platform, supported by healthy demand, full-price selling, digital momentum and product innovation, while DKNY, Karl Lagerfeld and Vilebrequin are contributing to growth.

The Marc Jacobs acquisition adds an owned-brand platform with opportunities across categories, channels and geographies, alongside a strong direct-to-consumer presence. Robust liquidity and disciplined inventory management provide flexibility to invest in brands and return capital. GIII currently has a Zacks Rank #2 and a Value Score of A. You can see the complete list of today’s Zacks #1 Rank stocks here.

HF Sinclair is an independent energy company producing and marketing gasoline, diesel, jet fuel, renewable diesel, lubricants and specialty products. The company’s refining system remains the primary earnings driver and operates seven complex refineries across the Mid-Continent, Southwest, Rocky Mountains and Pacific Northwest. HF Sinclair continues to invest in projects designed to improve feedstock access, product yields and logistics flexibility rather than relying solely on favorable refining cracks.

The company’s investments in the El Dorado vacuum furnace project, its Go-West initiative and its marketing business should help HF Sinclair process crude more efficiently, move fuel to where it is needed and sell products in markets offering better opportunities. Additionally, HF Sinclair’s renewable diesel platform has become a more constructive contributor as credit values, tax benefits and operating volumes support profitability. DINO currently sports a Zacks Rank #1 and has a Value Score of B. 

Houston, TX-based Par Pacific offers a compelling investment case, supported by its integrated downstream platform spanning refining, logistics and retail operations. The company combines strong financial flexibility, with $937.7 million in liquidity, an active share repurchase program and lower financing costs, positioning it to create shareholder value through market cycles. Operational execution remains a key strength, highlighted by record Hawaii and Montana throughput, restored Washington operations and completed Rockies maintenance.

Hawaii Renewables provides an additional long-term growth catalyst as renewable diesel production ramps through the second half of 2026, while excess RIN monetization and affiliate earnings further support durable cash flow growth. PARR currently sports a Zacks Rank #1 and has a Value Score of A.

Genworth Financial provides mortgage and long-term care insurance products and related services in the United States. The company is well-positioned for long-term growth, supported by strong operating performance in its mortgage insurance business, Enact and continued progress on its strategic initiatives. Enact's solid capital position, favorable insurance persistency and growing new insurance business support earnings stability and capital returns.

Meanwhile, the expansion of its CareScout platform across home care and senior living communities creates opportunities to capitalize on growing demand for aging-related services. The planned launch of Care Assurance Worksite further strengthens its growth prospects. Additionally, continued progress in long-term care insurance rate actions supports the sustainability of its legacy business. Despite rising claims pressures, disciplined capital management and ongoing share repurchases underpin shareholder value. GNW has a Value Score of A and a Zacks Rank of 2 at present.

Parsippany, NJ-based PBF Energy benefits from a geographically diversified refining network that provides flexibility in sourcing crude, optimizing operations and supplying multiple regional markets. Its complex refining system enables the processing of a broad range of crude types while producing higher-value refined products, supporting profitability as market conditions evolve. The company also maintains a relatively conservative balance sheet with solid liquidity, providing financial flexibility and resilience through refining cycles while supporting its focus on reducing debt when conditions allow.

In addition, PBF continues to advance its Refining Business Improvement program, which is aimed at lowering costs and improving operational efficiency. These initiatives are expected to enhance refinery performance, reduce operating and capital expenditure, and strengthen long-term earnings potential, positioning the company to benefit from improved reliability and disciplined execution. PBF currently flaunts a Zacks Rank #1 and has a Value Score of A.